Ecommerce Playbook: Numbers, Struggles & Growth Meet PAM: The Profit Allocation Model Revolutionizing Ad Budgets
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Dec 10, 2024 
Join Luke Austin, VP of e-commerce strategies at Common Thread Collective, and Tony Chop, VP of paid media at the same firm, as they unveil PAM—the Profit Allocation Model. This innovative tool revolutionizes how e-commerce businesses allocate ad budgets to maximize profitability. They discuss the significance of incrementality for evaluating ad success and share insights on optimizing budget distribution across channels. Tune in to learn how PAM streamlines decision-making and connects business goals with actionable advertising strategies!
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PAM: A Profit-Focused System
- PAM, the Profit Allocation Model, helps optimize ad budgets by aligning them with profitability goals.
- It simplifies decisions about budget allocation, channel distribution, and campaign targets.
Key Questions for Budget Allocation
- Consider three key questions for media budget allocation: total budget, channel allocation, and campaign targets.
- Reflect on your current approach to these questions, as inconsistencies are common.
Spend AMER Model
- The Spend AMER model helps determine the total ad budget by considering factors like seasonality and historical performance.
- It optimizes for various scenarios, including maximizing contribution margin and revenue.